Exhibit 10.05
NEW SALLY HOLDINGS, INC.
STOCKHOLDERS AGREEMENT
Dated as of [ •
] , 2006
Table of Contents
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Page
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ARTICLE I
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GOVERNANCE
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1.1
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Composition of the Board of
Directors
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2
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1.2
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Committees
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3
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1.3
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Certificate of Incorporation and
By-laws
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3
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1.4
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Termination of Article I
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3
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ARTICLE II
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REGISTRATION
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2.1
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Demand Registrations
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3
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2.2
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Piggyback Registrations
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7
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2.3
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Registration Procedures
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8
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2.4
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Registration Expenses
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12
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2.5
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Participation in Underwritten
Registrations
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13
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2.6
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Shelf Take-Downs
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13
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2.7
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Rule 144; Legended Securities; etc.
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14
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2.8
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Holdback
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15
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ARTICLE III
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TRANSFERS
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3.1
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CDR Investor Group Transfer
Restrictions
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16
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3.2
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Family Stockholders Transfer
Restrictions
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16
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3.3
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Termination of Article III
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17
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ARTICLE IV
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INDEMNIFICATION
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4.1
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Indemnification
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17
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ARTICLE V
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DEFINITIONS
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5.1
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Defined Terms
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20
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5.2
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Terms Generally
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25
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i
Table of Contents
(continued)
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Page
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ARTICLE VI
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CERTAIN VOTING RIGHTS; STOCKHOLDER
MATTERS
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6.1
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Venture Capital Investment
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26
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6.2
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Access to Information; Etc.
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26
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6.3
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Family Group Representative
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27
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6.4
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Trustee Exculpation
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27
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ARTICLE VII
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MISCELLANEOUS
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7.1
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Term
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27
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7.2
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No Inconsistent Agreements
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28
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7.3
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Legend.
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28
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7.4
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Stock Splits, etc.
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28
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7.5
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Amendments and Waivers
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29
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7.6
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Successors and Assigns
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29
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7.7
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Severability
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29
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7.8
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Counterparts
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30
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7.9
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Descriptive Headings
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30
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7.10
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Governing Law
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30
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7.11
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Consent to Jurisdiction
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30
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7.12
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Waiver of Jury Trial
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30
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7.13
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Enforcement; Attorneys’ Fees
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30
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7.14
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No Third Party Beneficiaries
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31
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7.15
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Notices
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31
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7.16
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Entire Agreement
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33
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ii
STOCKHOLDERS AGREEMENT, dated as of
[ • ] , 200_ (as it may be amended from time to
time, this “ Agreement ”), among ( i
) New Sally Holdings, Inc., a Delaware corporation (the
“ Company ”), ( ii ) CDRS
Acquisition LLC, a Delaware limited liability company (“
CDR Investor ”), ( iii ) CD&R Parallel
Fund VII, L.P., a Cayman Islands exempted limited partnership
(“ CDR Parallel Fund ”), ( iv ) each
Family Stockholder, and ( v ) any other Stockholder
that may become a party to this Agreement after the date and
pursuant to the terms hereof.
W I T N E S
S E T H :
WHEREAS, pursuant to an Investment
Agreement, dated as of June 19, 2006 (as amended from time to
time in accordance with its terms, the “ Investment
Agreement ”), among the Company, Alberto-Culver Company,
a Delaware corporation (“ Alberto-Culver ”), New
Aristotle Company, a Delaware corporation, Sally Holdings, Inc., a
Delaware corporation (“ Sally ”) and CDR
Investor, CDR Investor has agreed to acquire, on the terms and
subject to the conditions set forth in such agreement, newly issued
shares of the Class A common stock, par value $0.01 per share
(the “Class A Common Stock”) of the Company Stock
(such transaction, the “ Investment
”);
WHEREAS, pursuant to the Investment
Agreement, CDR Investor may assign all or a portion of its rights
thereunder to CDR Parallel Fund;
WHEREAS, as of the date hereof, the
parties hereto (other than the Company) will own the following
number of shares of Common Stock: ( i ) CDR Investor
will own [ • ] shares of Class A Common
Stock, ( ii ) CDR Parallel Fund will own [
• ] shares of Class A Common Stock, and (
iii ) the Family Group, in the aggregate, will own,
[ • ] shares of Common Stock (the “
Initial Family Group Shares ”);
WHEREAS, at 12:01 a.m. Eastern
Standard Time on the first day following the date hereof, each
outstanding share of Class A Common Stock held by CDR Investor
and CDR Parallel Fund shall automatically convert into a share of
Common Stock;
WHEREAS, it is a condition to the
consummation of the transactions contemplated by the Investment
Agreement that the Company execute and deliver this Agreement;
and
WHEREAS, each of the parties hereto
wishes to set forth in this Agreement certain terms and conditions
regarding the Investment and the ownership of shares of Common
Stock, including certain registration rights applicable to such
shares, restrictions on the transfer of such shares, and the
management of the Company and its subsidiaries.
NOW, THEREFORE, in consideration of
the mutual agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
GOVERNANCE
1.1 Composition of the Board of
Directors . (a) The by-laws of the Company shall provide
that so long as this Article I is in effect the Board shall consist
of eleven directors divided into three classes, as nearly equal in
number as possible, such directors to be nominated and elected in
accordance with the by-laws and the provisions of this Agreement.
Subject to Section 6.2(a) of the Investment Agreement, as of
the Closing Date, the directors shall consist of five directors
designated by CDR Investor, at least two of whom qualify as
Independent Directors (such designees and any persons nominated
pursuant to Section 1.1(b) and elected as directors and any
persons designated as replacement directors pursuant to
Section 1.1(c), the “ CDR Designees ”) and
six directors, one of whom shall be the individual identified
pursuant to Section 6.2(a) of the Investment Agreement and
five additional directors designated by Alberto-Culver, at least
four of whom qualify as Independent Directors, pursuant to such
Section (such designees, any persons nominated and elected as
directors or designated as replacement directors pursuant to
Section 1.1(d) and any other director (other than the CDR
Designees) (the “ Non-CDR Directors ”)), and two
CDR Designees and two Non-CDR Directors will be represented in each
of Class I and Class II and Class III shall consist of one CDR
Designee and two Non-CDR Directors. In connection with the 2007
annual meeting of the Company, the Company shall take all actions
necessary to provide that the initial CDR Designees and the initial
Non-CDR Directors included in Class I as of the date hereof are
nominated for re-election to the Board at such annual
meeting.
(b) Following the 2007 annual
meeting of stockholders of the Company: ( i ) so long
as the CDR Percentage Interest equals or exceeds 45%, CDR Investor
shall have the right to nominate five directors; ( ii
) if the CDR Percentage Interest is less than 45% but equals
or exceeds 35%, CDR Investor shall have the right to nominate four
directors; ( iii ) if the CDR Percentage Interest is
less than 35% but equals or exceeds 25%, CDR Investor shall have
the right to nominate three directors; ( iv ) if the
CDR Percentage Interest is less than 25% but equals or exceeds 15%,
CDR Investor shall have the right to nominate two directors; and (
v ) if the CDR Percentage Interest is less than 15% but
equals or exceeds 5%, CDR Investor shall have the right to nominate
one director. Following the 2007 annual meeting of stockholders of
the Company, the remaining directors of the Board shall be
nominated in accordance with this Agreement and the provisions of
the by-laws of the Company.
(c) Subject to Section 1.1(b),
the CDR Designees who are members of the Nominating and Corporate
Governance Committee (or if none remain in office, the remaining
CDR Designees) shall have the right to designate any replacement
for a CDR Designee upon the death, resignation, retirement,
disqualification or removal (except for a director removed for
cause by the stockholders) from office of such director.
2
(d) Until the 2007 annual meeting of
stockholders of the Company, the Non-CDR Directors by majority vote
or consent of those Non-CDR Directors then in office shall have the
right to designate any replacement for a Non-CDR Director upon the
death, resignation, retirement, disqualification or removal (except
for a director removed for cause by the stockholders) from office
of such director.
1.2 Committees . The Board
shall have the following committees: an Audit Committee,
Compensation Committee, Nominating and Corporate Governance
Committee, Executive Committee and Finance Committee (as such terms
are defined in the Company’s by-laws). Each of the foregoing
committees shall have four members, of whom, in each case, two
members shall be CDR Designees and two shall be Non-CDR Directors,
provided that all the members of each of the Audit
Committee, Compensation Committee and Nominating and Corporate
Governance Committee shall qualify as Independent Directors. The
chairperson of each of the Compensation Committee, Nominating and
Corporate Governance Committee and Finance Committee shall be a CDR
Designee, and the chairpersons of the remaining committees shall be
Non-CDR Directors.
1.3 Certificate of Incorporation
and By-laws . The Company and CDR Investor shall take or cause
to be taken all lawful action necessary to ensure at all times as
of and following the Closing Date that the certificate of
incorporation and by-laws of the Company are not inconsistent with
the provisions of this Agreement or the transactions contemplated
hereby.
1.4 Termination of Article I
. Subject to Section 7.1 , this Article I shall
terminate and be of no further force or effect on the tenth
anniversary of the Closing Date.
ARTICLE II
REGISTRATION
2.1 Demand Registrations
.
(a) Requests for Registration
. At any time following the first anniversary of the Closing Date,
CDR Investor may request in writing, on behalf of CDR Investor
Group, that the Company effect the registration of all or any part
of the Registrable Securities held by CDR Investor Group (a “
Registration Request ”), provided that, prior
to the second anniversary of the Closing Date, the number of shares
of Common Stock to be sold by CDR Investor Group pursuant to a
Registration Request shall be limited to an amount that will not
cause the CDR Percentage Interest to be less than 35%. At any time
following the 180th day after the Closing Date, the Family Group
Representative may make a Registration Request on behalf of the
Family Group, provided that the number of shares of Common
Stock to be sold by the Family Group pursuant to such
Registration
3
Request ( i ) shall equal 50% of the
Initial Family Group Shares if such Registration Request is made
prior to the first anniversary of the Closing Date, and ( ii
) shall equal at least 50% of the Initial Family Group Shares
if such Registration Request is made following the first
anniversary of the Closing Date, and, provided
further , that such sale shall not be prohibited under the
Support Agreement. Promptly after its receipt of any Registration
Request, the Company will give written notice of such request to
all other Stockholders, and will use its reasonable best efforts to
register, in accordance with the provisions of this Agreement, all
Registrable Securities that have been requested to be registered in
the Registration Request or by any other Stockholders by written
notice to the Company given within fifteen Business Days after the
date the Company has given such Stockholders notice of the
Registration Request. The Company will pay all Registration
Expenses incurred in connection with any registration pursuant to
this Section 2.1. Any registration requested by CDR Investor
or by the Family Group Representative pursuant to
Section 2.1(a) or 2.1(c) is referred to in this Agreement as a
“ Demand Registration ”.
(b) Limitation on Demand
Registrations . CDR Investor will be entitled to initiate no
more than five Demand Registrations (other than Short-Form
Registrations permitted pursuant to Section 2.1(c)) and the
Family Group Representative will be entitled to initiate no more
than two Demand Registrations, provided that the Family
Group Representative will not be entitled to initiate its second
Demand Registration until after CDR Investor has initiated at least
one Demand Registration (as determined for the purposes of the
limitations in this Section 2.1(b)). No request for
registration will count for the purposes of the limitations in this
Section 2.1(b) if ( i ) CDR Investor or the Family
Group Representative, as the case may be, determines in good faith
to withdraw (prior to the effective date of the Registration
Statement relating to such request) the proposed registration due
to marketing or regulatory reasons, ( ii ) the
Registration Statement relating to such request is not declared
effective within 180 days of the date such Registration Statement
is first filed with the Commission (other than solely by reason of
CDR Investor or the Family Group Representative, as the case may
be, having refused to proceed) and CDR Investor or the Family Group
Representative, as the case may be, withdraws its Registration
Request prior to such Registration Statement being declared
effective, ( iii ) prior to the sale of at least 90% of
the Registrable Securities included in the applicable registration
relating to such request, such registration is adversely affected
by any stop order, injunction or other order or requirement of the
Commission or other governmental agency or court for any reason and
the Company fails to have such stop order, injunction or other
order or requirement removed, withdrawn or resolved to CDR
Investor’s or the Family Group Representative’s, as the
case may be, reasonable satisfaction within thirty days of the date
of such order, ( iv ) more than 10% of the Registrable
Securities requested by CDR Investor or the Family Group
Representative, as the case may be, to be included in the
registration are not so included pursuant to Section 2.1(f),
or ( v ) the conditions to closing specified in the
underwriting agreement or purchase agreement entered into in
connection with the registration relating to such
4
request are not satisfied (other than as a
result of a material default or breach thereunder by CDR Investor
or the Family Group Representative, as the case may be).
Notwithstanding the foregoing, the Company will pay all
Registration Expenses in connection with any request for
registration pursuant to Section 2.1(a) regardless of whether
or not such request counts toward the limitation set forth
above.
(c) Short-Form Registrations
. The Company will use its reasonable best efforts to qualify for
registration on Form S-3 or any comparable or successor form
or forms or any similar short-form registration (“
Short-Form Registrations ”), and, if requested by CDR
Investor or the Family Group Representative, as the case may be,
and available to the Company, such Short-Form Registration will be
a “shelf” registration statement providing for the
registration of, and the sale on a continuous or delayed basis of
the Registrable Securities, pursuant to Rule 415. In no event shall
the Company be obligated to effect any shelf registration other
than pursuant to a Short-Form Registration. The Company will pay
all Registration Expenses incurred in connection with any
Short-Form Registration. If any Demand Registration is proposed to
be a Short-Form Registration and an underwritten offering, and if
the managing underwriter shall advise the Company that, in its
opinion, it is of material importance to the success of such
proposed offering to file a registration statement on Form S-1
(or any successor or similar registration statement) or to include
in such registration statement information not required to be
included in a Short-Form Registration, then the Company will file a
registration statement on Form S-1 or supplement the
Short-Form Registration as reasonably requested by such managing
underwriter (it being understood and agreed that any such
registration shall not count as a “Demand Registration”
for purposes of calculating how many “Demand
Registrations” CDR Investor or the Family Group
Representative, as the case may be, has initiated).
(d) Restrictions on Demand
Registrations . If the filing, initial effectiveness or
continued use of a registration statement, including a shelf
registration statement pursuant to Rule 415, with respect to a
Demand Registration would require the Company to make a public
disclosure of material non-public information, which disclosure in
the good faith judgment of the Board (after consultation with
external legal counsel) ( i ) would be required to be
made in any Registration Statement so that such Registration
Statement would not be materially misleading, ( ii
) would not be required to be made at such time but for the
filing, effectiveness or continued use of such Registration
Statement, and ( iii ) would reasonably be expected to
have a material adverse effect on the Company or its business or on
the Company’s ability to effect a material proposed
acquisition, disposition, financing, reorganization,
recapitalization or similar transaction, then the Company may, upon
giving prompt written notice of such action to the Stockholders
participating in such registration, delay the filing or initial
effectiveness of, or suspend use of, such Registration Statement,
provided , that the Company shall not be permitted to do so
( x ) more than four times during any twelve-month
period or ( y ) for periods exceeding, in the
aggregate, ninety days during any twelve-month period. In the
event
5
the Company exercises its rights under the
preceding sentence, such Stockholders agree to suspend, promptly
upon their receipt of the notice referred to above, their use of
any prospectus relating to such registration in connection with any
sale or offer to sell Registrable Securities. If the Company so
postpones the filing of a prospectus or the effectiveness of a
Registration Statement, CDR Investor or the Family Group
Representative, as the case may be, will be entitled to withdraw
such request and, if such request is withdrawn, such registration
request will not count for the purposes of the limitation set forth
in Section 2.1(b). The Company will pay all Registration
Expenses incurred in connection with any such aborted registration
or prospectus.
(e) Selection of Underwriters
.
(i) If CDR Investor or the Family
Group Representative, as the case may be, intends that the
Registrable Securities covered by its Registration Request shall be
distributed by means of an underwritten offering, CDR Investor or
the Family Group Representative, as the case may be, will so advise
the Company as a part of the Registration Request, and the Company
will include such information in the notice sent by the Company to
the other Stockholders with respect to such Registration Request.
In such event, the lead underwriter to administer the offering will
be chosen by CDR Investor or the Family Group Representative, as
the case may be, subject to the prior written consent, not to be
unreasonably withheld or delayed, of the Company.
(ii) If the offering is
underwritten, the right of any Stockholder to registration pursuant
to this Section 2.1 will be conditioned upon such
Stockholder’s participation in such underwriting and the
inclusion of such Stockholder’s Registrable Securities in the
underwriting (unless otherwise agreed to by CDR Investor or the
Family Group Representative, as the case may be), and each such
Stockholder will (together with the Company and the other
Stockholders distributing their securities through such
underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such
underwriting. If any Stockholder disapproves of the terms of the
underwriting, such Stockholder may elect to withdraw therefrom by
written notice to the Company, the managing underwriter and CDR
Investor or the Family Group Representative, as the case may
be.
(f) Priority on Demand
Registrations . The Company will not include in any
underwritten registration pursuant to Section 2.1 any
securities that are not Registrable Securities, without the prior
written consent of CDR Investor in the case of a Registration
Request made by CDR Investor or of the Family Group Representative
in the case of a Registration Request made by the Family Group
Representative. If the managing underwriter advises the Company
that in its reasonable opinion the number of Registrable Securities
(and, if permitted hereunder, other securities requested to be
included in such offering) exceeds the number of securities that
can be sold in such offering without
6
adversely affecting the marketability of the
offering (including an adverse effect on the per share offering
price), the Company will include in such offering only such number
of securities that in the reasonable opinion of such underwriters
can be sold without adversely affecting the marketability of the
offering, which securities will be so included in the following
order of priority: ( i ) first, Registrable Securities
of CDR Investor Group in the case of a Registration Request made by
CDR Investor or of the Family Group in the case of a Registration
Request made by the Family Group Representative and ( ii
) second, Registrable Securities of any other Stockholders who
have delivered written requests for Piggyback Registration pursuant
to Section 2.2, pro rata on the basis of the aggregate
number of Registrable Securities owned by each such Stockholder and
( iii ) any other securities of the Company that have
been requested to be so included, subject to the terms of this
Agreement.
(g) Effective Registration
Statement . A registration requested pursuant to
Section 2.1(a) shall not be deemed to have been effected
unless it is declared effective by the Commission and remains
effective for the period specified in
Section 2.3(b).
2.2 Piggyback Registrations
.
(a) Right to Piggyback .
Whenever the Company proposes to register any of its securities,
other than a registration pursuant to Section 2.1 or a Special
Registration, and the registration form to be filed may be used for
the registration or qualification for distribution of Registrable
Securities, the Company will give prompt written notice to all
Stockholders of its intention to effect such a registration and
will include in such registration all Registrable Securities with
respect to which the Company has received written requests for
inclusion therein within fifteen Business Days after the date of
the Company’s notice (a “ Piggyback Registration
”). Any Stockholder that has made such a written request may
withdraw its Registrable Securities from such Piggyback
Registration by giving written notice to the Company and the
managing underwriter, if any, on or before the 15th Business Day
prior to the planned effective date of such Piggyback Registration.
The Company may terminate or withdraw any registration under this
Section 2.2 prior to the effectiveness of such registration,
whether or not any Stockholder has elected to include Registrable
Securities in such registration, and except for the obligation to
pay Registration Expenses pursuant to Section 2.2(c) the
Company will have no liability to any Stockholder in connection
with such termination or withdrawal.
(b) Underwritten Registration
. If the registration referred to in Section 2.2(a) is
proposed to be underwritten, the Company will so advise the
Stockholders as a part of the written notice given pursuant to
Section 2.2(a). In such event, the right of any Stockholder to
registration pursuant to this Section 2.2 will be conditioned
upon such Stockholder’s participation in such underwriting
and the inclusion of such Stockholder’s Registrable
Securities in the underwriting, and each such Stockholder will
(together with the Company and the other Stockholders distributing
their securities through such
7
underwriting) enter into an underwriting
agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. If any Stockholder
disapproves of the terms of the underwriting, such Stockholder may
elect to withdraw therefrom by written notice to the Company, the
managing underwriter and CDR Investor or the Family Group
Representative, as the case may be.
(c) Piggyback Registration
Expenses . The Company will pay all Registration Expenses in
connection with any Piggyback Registration, whether or not any
registration or prospectus becomes effective or final.
(d) Priority on Primary
Registrations . If a Piggyback Registration relates to an
underwritten primary offering on behalf of the Company, and the
managing underwriters advise the Company that in their reasonable
opinion the number of securities requested to be included in such
registration exceeds the number which can be sold without adversely
affecting the marketability of such offering (including an adverse
effect on the per share offering price), the Company will include
in such registration or prospectus only such number of securities
that in the reasonable opinion of such underwriters can be sold
without adversely affecting the marketability of the offering
(including an adverse effect on the per share offering price),
which securities will be so included in the following order of
priority: ( i ) first , the securities the
Company proposes to sell and ( ii ) second ,
Registrable Securities of any Stockholders who have requested
registration of Registrable Securities pursuant to Sections 2.1 or
2.2, pro rata on the basis of the aggregate number of such
securities or shares owned by each such Stockholder or
Person.
2.3 Registration Procedures .
Subject to Section 2.1(d), whenever the Stockholders of
Registrable Securities have requested that any Registrable
Securities be registered pursuant to Sections 2.1 or 2.2 of
this Agreement, the Company will use its reasonable best efforts to
effect the registration and sale of such Registrable Securities as
soon as reasonably practicable in accordance with the intended
method of disposition thereof. A registration requested pursuant to
Section 2.1(a) shall be effected by the filing of a
Registration Statement on a form agreed to by CDR Investor or the
Family Group Representative, as the case may be. Without limiting
the generality of the foregoing, the Company will, as expeditiously
as possible:
(a) prepare and (within forty-five
days after the end of the fifteen Business Day period within which
requests for registration may be given to the Company pursuant
hereto) file with the Commission a Registration Statement with
respect to such Registrable Securities, make all required filings
with the NASD and thereafter use its reasonable best efforts to
cause such Registration Statement to become effective as soon as
reasonably practicable, provided that before filing a
Registration Statement or any amendments or supplements thereto,
the Company will furnish to Stockholders’ Counsel copies of
all such documents proposed to be filed, which documents will be
subject to review of such counsel at the Company’s
expense.
8
(b) prepare and file with the
Commission such amendments and supplements to such Registration
Statement as may be necessary to keep such Registration Statement
effective for a period of either ( i ) not less than
six months or, if such Registration Statement relates to an
underwritten offering, such longer period as in the opinion of
counsel for the underwriters a prospectus is required by law to be
delivered in connection with sales of Registrable Securities by an
underwriter or dealer or two years in the case of shelf
registration statements (or such shorter period ending on the date
that the securities covered by such shelf registration statement
cease to constitute Registrable Securities) or ( ii
) such shorter period as will terminate when all of the
securities covered by such Registration Statement have been
disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof set forth in such Registration
Statement (but in any event not before the expiration of any longer
period required under the Securities Act), and comply with the
provisions of the Securities Act with respect to the disposition of
all securities covered by such Registration Statement until such
time as all of such securities have been disposed of in accordance
with the intended methods of disposition by the seller or sellers
thereof set forth in such Registration Statement;
(c) furnish to each seller of
Registrable Securities such number of copies, without charge, of
such Registration Statement, each amendment and supplement thereto,
including each preliminary prospectus, final prospectus, all
exhibits and other documents filed therewith and such other
documents as such seller may reasonably request including in order
to facilitate the disposition of the Registrable Securities owned
by such seller;
(d) use its reasonable best efforts
to register or qualify such Registrable Securities under such other
securities or blue sky laws of such jurisdictions as any seller
reasonably requests and do any and all other acts and things that
may be necessary or reasonably advisable to enable such seller to
consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller ( provided that the Company
will not be required to ( i ) qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this subsection, ( ii
) subject itself to taxation in any such jurisdiction or (
iii ) consent to general service of process in any such
jurisdiction);
(e) use its reasonable best efforts
to cause all Registrable Securities covered by such Registration
Statement to be registered with or approved by such other
governmental agencies, authorities and self-regulatory bodies as
may be necessary or reasonably advisable in light of the business
and operations of the Company to enable the seller or sellers
thereof to consummate the disposition of such Registrable
Securities in accordance with the intended method or methods of
disposition thereof;
(f) promptly notify each seller of
such Registrable Securities and Stockholders’ Counsel, at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the
discovery of the happening of any event as a result of which, the
prospectus contains an untrue statement
9
of a material fact or omits any fact necessary
to make the statements therein not misleading in the light of the
circumstances under which they were made, and, as soon as
reasonably practicable, prepare and furnish to such seller a
reasonable number of copies of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
(g) promptly notify each seller of
any Registrable Securities covered by such Registration Statement
and Stockholders’ Counsel ( i ) when such
Registration Statement or the prospectus or any prospectus
supplement or post-effective amendment has been filed and, with
respect to such Registration Statement or any post-effective
amendment, when the same has become effective, ( ii
) of any request by the Commission for amendments or
supplements to such registration statement or to amend or to
supplement such prospectus or for additional information, and (
iii ) of the issuance by the Commission of any stop
order suspending the effectiveness of such registration statement
or the initiation of any proceedings for any of such
purposes;
(h) use its reasonable best efforts
to cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the
Company are then listed or, if no similar securities issued by the
Company are then listed on any securities exchange, use its
reasonable best efforts to cause all such Registrable Securities to
be listed on the New York Stock Exchange or NASDAQ, as determined
by the Company;
(i) provide a transfer agent and
registrar for all such Registrable Securities not later than the
effective date of such Registration Statement;
(j) enter into such customary
agreements (including underwriting agreements with customary
provisions) and take all such other actions as CDR Investor or the
Family Group Representative, as the case may be, or the
underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities
(including, without limitation, effecting a share split or a
combination of shares);
(k) make available for inspection by
any seller of Registrable Securities and Stockholders’
Counsel, any underwriter participating in any disposition pursuant
to such Registration Statement and any attorney, accountant or
other agent retained by any such seller or underwriter, all
financial and other records, pertinent corporate documents and
documents relating to the business of the Company, and cause the
Company’s officers, directors, employees and independent
accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in
connection with such Registration Statement, provided that
CDR Investor or the Family Group Representative, as the case may
be, will, and will use its commercially reasonable efforts to cause
each such underwriter, accountant or other agent to, ( i
) enter into a
10
confidentiality agreement in form and substance
reasonably satisfactory to the Company and ( ii
) minimize the disruption to the Company’s business in
connection with the foregoing;
(l) otherwise comply with all
applicable rules and regulations of the Commission, and will
provide to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act no later
than forty-five days after the end of any twelve-month period (or
ninety days, if such period is a fiscal year) commencing at the end
of any fiscal quarter in which Registrable Securities are sold to
underwriters or if no underwriting commencing with the first month
of the first fiscal quarter after the effective date of the
registration statement;
(m) in the event of the issuance of
any stop order suspending the effectiveness of a Registration
Statement, or of any order suspending or preventing the use of any
related prospectus or ceasing trading of any securities included in
such Registration Statement for sale in any jurisdiction, use every
reasonable effort to promptly obtain the withdrawal of such
order;
(n) take such other actions as the
underwriters reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities, including, without
limitation, preparing for and participating in such number of
“road shows” and all such other customary selling
efforts as the underwriters reasonably request in order to expedite
or facilitate such disposition;
(o) obtain one or more comfort
letters, addressed to the sellers of Registrable Securities, dated
the effective date of such Registration Statement (and, if such
registration includes an underwritten public offering dated the
date of the closing under the underwriting agreement for such
offering), signed by the Company’s independent public
accountants in customary form and covering such matters of the type
customarily covered by comfort letters as CDR Investor or the
Family Group Representative, as the case may be, holding
Registrable Securities being sold in such offering reasonably
request;
(p) provide legal opinions of the
Company’s outside counsel, addressed to the Stockholders
holding the Registrable Securities being sold, dated the effective
date of such Registration Statement, each amendment and supplement
thereto (and, if such registration includes an underwritten public
offering, dated the date of the closing under the underwriting
agreement), with respect to the Registration Statement, each
amendment and supplement thereto (including the preliminary
prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by
legal opinions of such nature; and
11
(q) take or cause to be taken all
other actions, and do and cause to be done all other things,
necessary or reasonably advisable in the opinion of
Stockholders’ Counsel to effect the registration of such
Registrable Securities contemplated hereby.
The Company agrees not to file or
make any amendment to any Registration Statement with respect to
any Registrable Securities, or any amendment of or supplement to
the prospectus used in connection therewith, that refers to any
Stockholder covered thereby by name, or otherwise identifies such
Stockholder as the holder of any securities of the Company, without
the consent of such Stockholder, such consent not to be
unreasonably withheld or delayed, unless and to the extent such
disclosure is required by law.
The Company may require each
Stockholder of Registrable Securities as to which any registration
is being effected to furnish the Company with such information
regarding such Stockholder and pertinent to the disclosure
requirements relating to the registration and the distribution of
such securities as the Company may from time to time reasonably
request in writing.
2.4 Registration Expenses
.
(a) Except as otherwise provided in
this Agreement, all expenses incidental to the Company’s
performance of or compliance with this Agreement, including,
without limitation, all registration and filing fees, fees and
expenses of compliance with securities or blue sky laws, word
processing, duplicating and printing expenses, messenger and
delivery expenses, and fees and disbursements of counsel for the
Company and all independent certified public accountants,
underwriters and other Persons retained by the Company (all such
expenses, “ Registration Expenses ”), will be
borne by the Company. The Company will, in any event, pay its
internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit or